New homes more popular than ever

Seventy nine per cent of house-hunters would prefer to buy a brand new home, as opposed to renting or buying a second-hand property, according to a new Barratt Homes survey.

That represents a 27 per cent increase in the popularity of new builds since the home builder conducted the same research in 2008.

The 5,000 people polled this time around noted that new homes offer low maintenance, low running costs, high specifications and solid construction.

Jan Ruston, a sales director for Barratt Homes, said: “With schemes like the Government-backed New Buy 95 per cent mortgage scheme, buyers can buy a brand new home with as little as a five per cent deposit.”

Thirty three per cent of those polled had been saving a deposit for more than five years, and 60 per cent of respondents admitted to being assisted by their parents in buying a home, including as a guarantor (eight per cent), providing a loan (nine per cent) to help with furnishing the property (27 per cent) or help with a deposit (20 per cent).

Do you speak ‘Estate Agent’?

Have you ever had to produce a set of particulars for a property that you know will be difficult to sell?

Estate agent jargon has become a real art form over the years.  As more and more agents look to give themselves the edge over others when selling a property they often look to ‘sex-up’ their brochures and adverts.

Here is a taste of some of the terms that are frequently found in estate agent brochures along with their real meaning.

“Ambient nightlife” – next door to a pub
“Easy maintained gardens” – gardens so small that investing in a lawn mower would be a waste of money
“Attractive period building with original features” – this house hasn’t had any renovations since it was built in 1826
“Convenient local transport links” – railway running through back garden with a busy bus stop right outside
“Much potential” – requires a lot of money
“Secluded location” – in the middle of nowhere, barren and desolate. It wouldn’t look out of place as the film set for Mad Max
“Charming” – tiny and the cottage’s main entrance is only five foot high
“Close to schools” – the noise from the playground was deafening
“Bijou” – would suite contortionist
“Studio” – glorified broom cupboard
“Easy access to M4″ – next door to busy slip road
“Interesting conversion” – it doesn’t work
“Deceptively spacious” – furniture removed to  make it look bigger
“Some en-suite facilities” – sink in bedroom corner

Proposal to amend Estate Agents Act 1979 is widely criticised

The Government’s proposal to amend the Estate Agents Act, as part of its bid to reduce the regulatory burdens on business in order to help boost economic growth, has been slammed by the property industry.

The Department for Business Innovation & Skills (BIS) issued a consultation in June entitled Encouraging New Business Models – Proposal to amend the Estate Agents Act 1979, asking various property professionals for their views on the proposal to amend this legislation. The BIS seemingly wants to exempt “passive intermediaries offering a limited, low-risk service”, to homebuyers and vendors from being regulated by the Act.

What this effectively means is that passive enterprises, particularly SMEs, providing a communication platform for the exchange of information about properties for sale between vendors and purchasers, may be excused from certain laws in the Act.

The aim is to help businesses to innovate and grow and allow new business models to emerge while ensuring that consumer protection is not unduly compromised. But the fear is that if the proposed amends to the Act are approved, there may be a surge in alternative agents with the ability to operate outside the rules of the Act. This could potentially have an adverse impact on transparency levels, placing industry reputation, jobs and consumer protection at risk.

“We strongly oppose any measure that erodes vital consumer protection, which we believe these proposals will do,” said Mark Hayward (left), President of the National Association of Estate Agents (NAEA). “We would be disappointed to see any Government recommendations following this consultation which undermine consumer protection, and which do not take into account important issues for consumers such as including the lettings industry within the definition of the Estate Agents Act.”

Robert Bartlett, CEO of Chesterton Humberts, believes that the impact of the proposed changes could lead to an escalation in the volume of dodgy agents.

He commented, “It will have a detrimental and negative effect on vendors and purchasers as these ‘passive intermediaries’ do not need to be regulated or licensed. The estate agency industry is not regulated enough and this potentially opens up the flood gates to rogue agents.”

Whilst acknowledging the necessity to change the legislation, describing it as “out of date and produced before the advent of the internet”, the Royal Institution of Chartered Surveyors (RICS) says that it is concerned about the way Government are going about this and have expressed these worries in their response to the consultation.

Paul McCormack, RICS regulation policy manager, wrote in a letter to BIS, “RICS considers that section 22 of the 1979 Act, requiring minimum professional standards for agents to start trading, should also now be enacted to create a statuary level playing field for all sales, letting and management agents operating in this field.

“Many businesses operate in both sales and lettings, and the regulatory arrangements should reflect that fact. Such an approach would ensure minimum levels of consumer protection, and provide businesses operating in sales and lettings with a clear, simple and consistent approach that is lacking in the current unnecessarily complex regulatory arrangements.”

The Property Ombudsman’s response to the consultation was far sterner.

Ombudsman Christopher Hamer (left), writing both as Ombudsman and the independent Council to which he is accountable, said that his organisation does not believe that existing businesses are burdened, pointing to the existence of approximately 14,000 estate agencies in the UK, as evidence of the ease of the entry to the industry.

He wrote, “We recognise that the Government is striving to reduce regulation and restriction on businesses but the proposed amendments do quite clearly open up opportunities for the consumer to stray unknowingly into an environment where the protection they might expect to have is not in fact available to them.

“Whilst recognising that the Government is opposed to broadening regulation, we would continue to emphasise, and this view is supported by industry and consumer stakeholders, that legislating for letting agents should be a priority and therefore that broadening the scope of the legislation is what is required rather than narrowing it.”

But not everyone is against the planned changes to the Act.

Russell Quirk, founder of low cost online estate agent eMoov.co.uk, described the Estate Agents Act 179 as a “Dickensian piece of legislation that most agents have little regard for”.

Whilst it sounds like a law to ban estate agents, it’s actually a law to protect them from competition,” he added.

Mr Quirk continued, “We relish competition from all quarters as it can only serve to drive quality of service up and fees down. We therefore support the principle of any move to tear off some of the red tape within the house selling business as a positive step in providing more consumer choice amongst home sellers.”

First time buyers hold fire

The number of sales to first time buyers decreased to its lowest level in seven months during May, according to research from The National Association of Estate Agents’ (NAEA) market report for May, which shows that just 17 per cent of overall sales made during the month went to those buying their first home, compared with 24 per cent in April 2012.

This is the biggest slump recorded by the NAEA in over half a year – October 2011 was the last time agents reported such a decrease, when FTBs made up just 16 per cent of the market share. Prior to that, the figure has not been as low for over three years at the height of the financial crisis in December 2008 when FTBs stood at 10 per cent of the market.

The number of house hunters registering at branches across the country also decreased, with 274 per branch in May compared with 294 in April.

Sales remained stable across the property market for a third consecutive month in May, with an average of seven per branch. However, supply levels were bolstered during the month with an average 66 houses available, up from 62 in April.

“Sadly, as the NAEA predicted, the Government’s removal of the crucial Stamp Duty Holiday for properties priced at £250,000 and under has hit the fragile first time buyer market hard,” says NAEA President Mark Hayward (left).

“At what is a very turbulent time for the economy both here and in the Eurozone, which has prompted tighter mortgage restrictions from the major banks and placed increased pressure on household finances, the Government should be doing all it can to stimulate housing market activity.

“It remains to be seen what effect the £140bn emergency funding plan, announced jointly by the Treasury and Bank of England last month will have in encouraging banks to pass on cheaper mortgages to househunters.”

House prices will rise pincered between inadequate housing supply and mortgage lending constraints